ASIC has announced that QBE Insurance (Australia) Limited (QBE) will make changes to its outsourcing of escalated complaints and dispute resolution after ASIC raised concerns about the manner in which it had outsourced complaint and dispute resolution to an external Australian law firm.
In particular, ASIC was concerned that some QBE customers were receiving written communication on the letterhead of a law firm (rather than QBE-branded letterhead), and that this could create a potential barrier for those customers to resolve their disputes as they could:
- feel intimidated and possibly dissuaded from pursuing their complaint; and
- feel the need to seek unnecessary and costly legal representation.
ASIC Regulatory Guide 96 on debt collection guidelines says:
- collection action must be suspended while an EDR scheme considers a dispute
- Correspondence must not make inaccurate representations, including misrepresentations about liability or the amount owing (for example stating or implying that a debtor is liable for collection charges or fees, legal fees or charges that you are not legally entitled to claim)
- misrepresent that your correspondence is a court process or other court documents.
ASIC was also concerned that this practice was inconsistent with QBE’s Australian financial services licence (AFSL) obligations in relation to dispute resolution as well as the Australian Standard for complaints handling.
ASIC says that, in response to ASIC’s concerns, QBE has agreed to ensure, by the end of March, that all future communication with customers (relating to escalated complaints and dispute resolution) is QBE-branded, even where QBE may have received assistance from a law firm in preparing the correspondence.
ASIC RG 165.77 states:
A financial service provider, credit provider, credit service provider or unlicensed COI lender that outsources its IDR procedures to a third party service provider remains responsible for ensuring that its IDR procedures comply with the requirements in this regulatory guide.
